Trading conditions remained challenging through the third quarter. Although we saw strong store performance in January and growth in multi-channel revenues throughout the quarter, these were partially offset by more depressed store footfall patterns in February and March.
Gross margin increased by approximately 30bps compared with the third quarter of the previous year. This reflects continuing scale benefits as well as improved management of the clearance of both special buys and discontinued ranges. We now anticipate that gross margin growth for the full financial year will be approximately 20bps.
In line with our previous guidance, two new superstores were opened during the quarter, in Exeter and Stafford, the latter being a relocation of a sub-optimal existing unit. Our Greenford (West London) store opened on 5th April and a new store in Cambridge is anticipated before the end of June. This will bring the total number of new stores opened in the current financial year to 15 (including two relocations), as previously anticipated.
Looking ahead to next financial year, our new store pipeline remains encouraging with two leases signed since our last update, giving a total of six units contractually committed (including one relocation).
As at 31st March 2012 Dunelm had net cleared funds of £50.2m. Daily average net cleared funds over the year to date were £55.0m.
Nick Wharton, Chief Executive, commented:
“Our focus on the development of our Simply Value for Money proposition and growth both through new stores and through our multi-channel offering has seen Dunelm achieve a solid sales performance in what remains a very demanding retail environment.
“It is prudent to remain cautious about the wider economy and, recognising its impact on consumer confidence, we will maintain our disciplined approach to the management of gross margin and operating costs. However with a clear growth strategy and strong pipeline of new stores ahead we remain confident in the future prospects for the business.”